The joys of buying a yacht in Spain - Part One

June 2012

 

Before booking our flight from the UK we’d contacted Jordi, the broker in Mallorca, and asked for an appointment to see the boat on Wednesday soon after our arrival. ‘No problem’ he said, he’d get onto the owner and organise it. However not long before boarding the plane we got an email to say the owner was out on the boat but we could see it Thursday.  Damn! We really wanted to inspect the boat straight away and make up our mind whether we wanted to progress to organising a survey inspection and report if it met our expectations.

 

We had an uneventful flight and landed in Mallorca and walked out of the terminal into its hot summer temperatures contrasting greatly with that in London for our early morning departure. We looked a little odd with our heavy wet weather jackets draped over our arms but with strict luggage weight restrictions on the budget airlines we weren’t going to pack them.

 

Confident we could wrap this up quickly one way or the other, we’d booked six nights in a cheap backpackers, Hostal Terramar. On arrival were super impressed with both our location and room. We had a separate lounge/kitchenette and good sized bedroom with ensuite and when we opened the shutters discovered a great view over the marina. It was right on a square with a couple of bars and a stairway down to the main esplanade. How good was this. Marc did have one of the small single rooms at the back of the place but was only going to sleep in it anyway as our penthouse was the nerve centre of operation buy-a-boat.

Not a bad location for a backpackers

 We rang our Jordi, the broker, to confirm a time for the inspection next day. ‘Sorry boat not back yet. Back Friday,’ he tells us.  Slight inconvenience was becoming  mild irritation. We arranged to put the time to good use though and met with a British Yacht surveyor and discussed our plans. We’d found him through an advert on a sailing website and his manner, his explanation of exactly what he could offer and the questions he asked of us quickly convinced us he was the man for us. Comfortingly two separate sources later recommended him without any prompting.

 

The roof terrace was our favorite spot for sundowners

That night enjoying a bottle of wine and the views from the roof terrace we met Paul, the owner of the hostel, a Brit expat who turned out to be, of all things, a boat broker. Well wasn’t he keen to help us. He was certain he’d have the perfect boat on his books somewhere. Later that night we found out the downside of having a room overlooking the square which turned out to be on the direct route between two of the main nightclub areas popular with the locals. The sound of very loud drunks shouting to friends, singing badly, fighting with wives, girlfriends or, we think in one case, both, began about midnight and finished as the sun was rising. With no aircon or fan in the room closing the windows and shutters was not really option either so sleep was a disturbed affair to say the least.

 

 Sure enough, next morning Paul knocks on our door with the sales information on half a dozen yachts. None were a Jeaneau 43 DS but we decided one of those he had may have been a possible if the boat we’d come to see turned out a dead end. It was currently in charter which didn’t impress us too much as we were really after a private ownership boat but seeing we were already here we might as well look at it. We  duly made an appointment for 11.00am on the Saturday morning with the thought we could always cancel if Friday’s inspection went well.

 

Come late afternoon Thursday and still no call from Jordi so Rob rings him. ‘Friday no good. Boat back late Friday but not cleaned. You see Saturday. Must be twelve o’clock. Boat going back out,’ is the response. We were now past the mild irritation stage and the aggravation level was ramping up fast. His response also rang alarm bells with us. The pattern in Palma is that weekly charters finish on Friday afternoons, the boats are then serviced and the following week’s charterers go on board Saturday afternoon. We’d been told from the start this was a private boat but it was certainly now sounding like a charter boat so Rob asked Jordi directly whether the boat was owned by a charter company and got the quick reply. ‘No. No. I told you. Private owner. You see on Saturday.’ 

 

So now we had two boats to inspect  within an hour of each other on Saturday and nothing to see on Friday.  Hugely unimpressed with Jordi we went back into boat search mode, burning up the hostel’s wfi with a laptop and two IPads all trolling the internet for any yachts worth looking at in Mallorca or in fact on the nearby Spanish coast.

 

We’d originally had the 40 to 44 foot Beneteau Centre Cockpits on our short list but hadn’t found any we could inspect in the UK but there were an few in Mallorca so we arranged to see one on the Friday morning. We actually liked the cabin layout below decks a lot and this particular boat was well equipped and pretty well maintained. However, we all felt the cockpit itself was a little smaller than what we would like. We also spotted a well priced and very good looking Beneteau 473 similar to that we’d seen in Hamble and contacted the broker to have a look. It was on the opposite side of the island though and would have to wait until after the weekend.

 

Saturday dawned and we were at last going to see the boat we’d come all the way from the UK to inspect – maybe. As we were preparing  leave the hostel Rob’s phone pinged with an incoming text message.  It was from Jordi saying he was currently out sailing so wouldn’t be able to meet us but the owner, Juan, would be. We now left aggravation well behind and moved onto a simmering rage.

 

We duly inspected the later model Jeanneau 45DS charter boat that Paul had lined up. Not bad, reasonably well priced, a little basic regarding the equipment it came with and she was a little knocked around as most charter boats are. There was one major deal breaker though. It was fully booked up for the summer and wouldn’t actually be available to us until October. Scratch that one.

 

Then it was time. Had we wasted our money and time coming to Mallorca or not. We followed the directions to the correct marina and located the boat very quickly on a finger crowded with charter boats being serviced for their quick turn around. Shit! There on the boom were the stickers eeccharter.com . Rob mumbled a couple of obscenities about private boat pig’s bum and did a lot more than question Jordi’s parentage.

 

Wednesday had become Thursday, then Friday, but at least by Saturday we
were able to confirm the boat actually did exist. Jordi was still a phantom though.

 

We’d come too far to walk away now. We were going to see over this boat regardless. Cleaners were on board but there was no sign of the owner so we waited, wandered around the dock and waited a bit more. Eventually a very tall Spaniard strolled up the marina finger and walked on board.’ Are you Juan?’ we ask. ‘Yes, Yes. You’re here to look at my boat. Come aboard.’ 

 

The three of us then descended on Vironet Tres like tax inspectors combing through Paul Hogan’s bank statements. First up and most importantly we confirmed it did have the flexible layout we absolutely wanted which can be configured for two, three or four cabins below simply by moving a few interior panels. For a charter boat the interior furnishings were in surprisingly good condition. There were a few marks in the timber work but nothing like the carnage we’d seen on the boat at Falmouth. The engine was spotless and obviously well cared for.  The dingy was brand new and all the rigging looked good.
 

 

Rob began to quiz Juan to get the story. He had owned the boat since new but put it in the charter pool each summer while he worked as a professional skipper. Each winter he and his family went sailing down to the Canary Islands to escape the cold. He personally did all the maintenance, including between every charter,  and was very clearly proud of his boat.

 

This explanation and what we saw at first glance encouraged us to dig even deeper and every hatch, locker, floor panel and piece of equipment was closely inspected. And Juan fielded many a question. We discovered the sails were new in 2011 but the original sails were still in good condition and went with the boat as spares. It also had a cruising chute for light winds and we were very pleased to find out it was on a furler which fitted to a removable bow spit. The boat was a 2005 model and was actually one of the very last of this model made.

 

 

 

We did however start to run into a few issues. What the broker’s advertisement said the boat was equipped with didn’t match what was actually the case. The listing included a fridge and freezer. It had no freezer but rather the usual two fridge compartments. It didn’t have an inverter to step battery power up to 240 volt plus a few other minor discrepancies. We satisfied ourselves that we were definitely interested in buying the boat if no problems were revealed in a survey and the deal was right. When we conveyed this to Juan he actually appeared surprised that we were serious buyers that were  very interested in his boat.

 

Then the fun started. The first thing he did was ask if we knew the price and stated a figure 10,000 Euro dearer than the advertised price. Then to make it worse, he said it was not tax inclusive. Spanish VAT is 18% so you’re not talking peanuts regarding the difference between tax inc and plus tax. When we pointed this difference in price and tax status plus the other things the internet listing included that weren’t right, he simply said he didn’t know about that. The broker must have got it wrong.

 

Rob’s patience with the absent Jordi was now absolutely at its end and he asked very directly of Juan what his relationship was with his broker. Apparently Juan had simply let anyone interested list the boat and had never actually even met Jordi to which Rob said ‘OK, that guy has stuffed us around so much and told so many lies, if we can come to a deal, and if we buy your boat we will only want to deal directly with you and we don’t want him to get one Euro out of the sale.’ The thought of saving the brokerage fee produced a very quick. ‘No problem. Do you really want to buy my boat?’

 

We said we’d go away and talk it over and ring him very soon if we decided to make an offer. If it was acceptable we would want to have the boat lifted out for a survey on Monday or Tuesday  and complete the purchase as quickly as possible after that because we wanted to get as much sailing in as possible before winter. Simple really. What could be easier than that? If only.

 

First up, charterers we’re going to be arriving in a couple of hours to take the boat out for the next week so it wouldn’t be available for a survey until the following Monday at the earliest. A number of other bookings were in place for the rest of the summer. Why didn’t we buy it in October or, we could buy it now and get the money from the charters ourselves.  We explained neither of those was an option for us and that if we agreed on a price and he wanted to sell us the boat, this week would have to be its last charter and away we went.

 

We really didn’t know what to think. The boat was very good, not perfect, but good. Could we come to an agreement on price given his higher ask plus tax was well over our budget and quite frankly more than we’d be prepared to pay even if it wasn’t? We’d now also removed the broker from the equation and here we were in Spain where we wouldn’t even be able to read the sales contract. If we walked away from this one the available options weren’t appealing. The second choice Jeanneau 43DS on our shortlist looked like a very, very good boat from all the many photos and information the owners had provided but it didn’t have the flexible cabin layout we so wanted and it was in Greece. We could incur much more expense trundling off to see it and still find something that put us off buying it.

 

We decided what the hell. The economy was in the toilet and boats were simply not selling. Real buyers like us were few and far between so we’d make an offer with the price we were prepared to pay and the conditions under which we were prepared to proceed. It was a long way below what he said he wanted but if he took it he took it. If not we moved on.

 

To make things absolutely clear we sent our offer as a text message that afternoon. The advantage of texting was we’d have a permanent record of both party’s communications should anyone’s recollections of what was agreed to suddenly change. We offered a little over 40,000Euro less than his ask, made it clear it was conditional on acceptable survey report and sea trial, the boat would have to be available for both straight after it returned from the current charter, it would need to be available for immediate delivery once payment was made and we finished by saying if this was not agreeable or possible let us know so we could move on with our boat search.  Then we prepared to sit and wait.

 

We’d offered so far under the asking price we thought we’d either get an immediate NO! or we’d be left hanging for a while before a counter figure was put to us and the bargaining begun. We were more than a little surprised when a txt came back fairly quickly ‘If it’s OK for you we can make an invoice for minimum legal value of appraisal. About 60000 and I pay the VAT.’ So now we knew it was game on. He wanted a very large chunk of the payment off the books to avoid paying as much tax. Then another txt followed ‘The boat could be delivered next week with a penalty of 3000.’ He was referring to a fee he said he would have to pay the charter company for withdrawing the boat from its bookings.

 

Nice try buddy. Our move now. ‘Sorry Juan. That’s our budget limit. We were going to offer 15,000 less and work up but decided to be straight up and not waste each others’ time. We need a legitimate bill of sale at the right price or we can’t insure the boat for the right value. Let us know if we can do business.’ The point about the insurance wasn’t absolutely correct because we knew we could get an agreed value policy but we were not going to risk getting our money or boat tied up in a Spanish court case over his fraudulent taxation scheme. Time to wait again and there was no prompt reply this time.

 

We extended our booking at the hostel for another couple of nights and started looking for an English speaking lawyer to handle the contractual aspects for us if the deal went ahead. Fortunately our landlord Paul helped us out here and put us intact with not a solicitor but rather another expat Britisher who  had an agency specialising in the purchase and export of boats from Spain. Her assistance and advice proved invaluable to us and was far more realistically priced than what some of the Spanish law sharks were talking.

 

We loved the view but the noise after midnight was unbelievable

 

The broker who had the Beneteau 473 on the far side of the island rang however saying it was available to look at so we said yes please, thinking it would be nice to have a plan B closer than Greece. There was also a very promising looking Dufour 44 on the southern Spanish coast but by now we really hoped we could buy something on Mallorca and sail away in it rather than have to chase all over Europe.

 

On Sunday we enjoyed a nice drive across Mallorca with the broker and saw some more of the countryside along the way. Rob’s phone was in and out of service during the trip and he was constantly checking to see if there was any response text from Juan. The Beneteau was actually a very good example of the 473 model. It was a one owner boat, a few years older than the Jeanneau but extremely well cared for. Not a mark anywhere. Marc and Karen were quite taken with and were already in the thought process of seeing themselves on board and what we could stow where. Rob liked the boat but was a little more reserved due to its older age.

 

Then the phone beeped with a text message, ‘We can do business. See you on Monday afternoon.’ Being with a broker in the process of trying to sell us a boat Rob kept a very straight face, and subtly  passed the phone to Marc and Karen for them to read the message.

 

After completing the inspection we conferred on the dock and agreed that we still all preferred the Jeanneau and yeehaa it looked like we had a deal. However this boat was a very viable Plan B should anything go wrong with the other.

 

We arranged to meet Juan at a café beside the marina on Monday evening and spent the day trying to keep our excitement in check just in case. That was not an easy task. We met with Patricia, our agent that Paul had put us onto and went through everything she felt we needed to know and be prepared for before our meeting. She would be able to check the contract for us etc when the time came which was a very large relief for us all.

 

At the café Juan arrived with his wife and young daughter along with their solicitor. We thought we already had a deal and were there simply to organise the mechanics of the sale but soon found out we were actually in round three of the argy bargy negotiations.  The solicitor started by saying that the tax was a problem for Juan and why didn’t we just make the price plus tax, export the boat out of Spain and then claim the tax back from the Spanish government.

 

Sounds simple but firstly we’d have to front with over $20,000 (Aus) to start with then hope we got it back later.  We’d actually been through all these options with Patricia and knew it was a minefield. Firstly we’d have to physically export the yacht by sailing it out of the European Union. The nearest option was Algeria which would be a long open sea passage on a boat we were not familiar with. Then we’d have to wait there for up to six weeks while the cancelation of the Spanish registration was completed at the pace of a thousand stampeding snails, then there would be a maze of Spanish Bureaucracy to work through at similar speed and we might see the money back a few months later. They way the Spanish Government’s books look at the moment they’re the last people you’d want owing you money. However the biggest problem was that as an exported, non tax paid boat there are many restrictions regarding how long you can spend in the European Union. Every time we sailed into an EU country they could audit us and if they feel you haven’t complied completely they simply seize the boat until you pay the VAT anyway. We certainly didn’t want to get involved in any of that drama.

 

The discussion went back and forwards fruitlessly for a while and finally the three of us withdrew for a quick conference. We agreed we all really wanted to get this deal done so back at the table we increased our offer by 3,000 Euro, (the amount of the penalty he wanted) but made it clear it was definately a tax included deal. We also said that was our take it or leave it point. They said they would think about.

 

By now we were beginning to wake up to the fact that nothing happens fast in Spain and we didn’t want to let this opportunity go to waste so we moved the discussion on to trying to arrange the logistics and time frame of the sale should it go ahead. Yes Juan could go with us to book to have boat lifted out at the nearby boatyard for survey on the following Monday after it returned from its charter. Yes we could sea trial it the same afternoon. Yes they were happy with payment in two stages via bank transfer. A deposit to be paid on the signing of the contract and balance on handover which we would want the following day.

 

Fine then. So as we were about to leave Rob recapped. If the deal goes ahead and if all is OK with the survey and sea trial on Monday we can sign the contract on Tuesday, transfer the first payment then, the balance on Wednesday and have the boat on Thursday once it was all in their account. At this point we thought the solicitor was going to have a heart attack as she spluttered she would need at least three or four weeks to do a contract. We just looked at each other in disbelief. This was all too hard. We re-enforced that we were not willing to sit around waiting and spending money on accomodation. We needed to have their reply the following day and if we went ahead it had to be quick so surely a simple contract couldn’t be that hard.

 

We then went back to the hostel in desperate need of a drink and thinking that Plan B was starting to look more attractive.

 

After lunch the following day a text beeped in, ‘Hi Rob. I’m busy today. We can go tomorrow afternoon to book the travel lift for Monday.’ Not wanting any further surprises we quickly texted back ‘Does that mean we have a deal at our  price?’ We did finally have a deal. All we needed now was for the boat to come up well in the survey and for the contract to be done. We had a pretty good idea which was likely to present the biggest problem. But that’s coming in Part Two.

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